MSFT Up As Market Stays Positive The stock market is up on light volume as the
Chicago PMI beat expectations despite
jobless claims coming in slightly higher than expectations. Shares of MSFT are volatile, however above break even. Upcoming catalysts include Windows 8 next year; entrance into the tablet market;
Windows Phone 7 / Mango rollout and adoption with hardware partner
Nokia; strides against current market leaders in cloud computing (see below); making money in the online business, including integration of
Skype and improving the search / display business; and continued evolution of
Kinect and next generation
Xbox. The stock currently trades at
6.9x Enterprise Value / TTM Free Cash Flow.
Microsoft Testing Social Networking Targeting Learning In Three Universities (ReadWriteWeb) Haven't we seen this story before? Microsoft is testing a targeted social network called So.cl on three college campuses: University of Washington, Syracuse University, and New York University. The network is built off of Bing's API and works as "a research experiment for students focused on combining web browsing, search, and social networking for the purposes of learning." The move is telling in that Microsoft is choosing not to go head-to-head with the big three of
Facebook (a huge partner and investment),
Twitter and Google+ and is instead taking an approach that targets a very specific niche.
Read » What Are Microsoft's Plans With Windows Phone? (WMPoweruser) For those who wonder what Microsoft’s game plan with Windows Phone is, a leaked roadmap should at least provide some pointers. Mango launched in the fourth fiscal quarter 2011 with new features, languages and countries. Tango will concentrate on enabling Windows Phone 7 on low-end handsets for the “best prices” and will come in the second quarter of 2012. Things will get real with Apollo however, in the fourth quarter 2012, when Microsoft finally expects volume to increase, enable the release of high-end super phones, and finally address the enterprise.
Even more than a year after Windows Phone 7's introduction, smartphones running the OS are underpowered compared to many other high-end smartphones.
Read » Asset Manager Buying Up Microsoft Stock (Seeking Alpha) JP Morgan Asset Management bought 19 million more share sof Microsoft the last quarter according to its latest 13F filing. The company purchases companies that are undervalued and considers selling them when they appear to be overvalued. That said, industry trends will continue to prove damaging to Microsoft's leadership position in PC software industry. Growing computer literacy and internet adoption have driven Microsoft's business for past two decades. However, going forward, increasing tablet adoption is going to change the complete industry dynamics.
Read » Microsoft Stock Will Be A Buy When The Following Happen (Seeking Alpha)How can a company as strong as Microsoft have such a stagnant stock? The reason is actually relatively simple. The stock market is a forward looking entity, and no one seems to like what they see for Microsoft. Microsoft's business model is under attack from all sides. The very core of the company, desktop software, is slowly eroding. Microsoft stock will be a buy if and when the company does the following:
- Ousts Steve Ballmer
- Doubles Dividend
- Big Buybacks
- Online Division Restructure
- Cut Research And Development
- Pursue Acquisitions
Microsoft is a company that is battling a myriad of structural issues, but most of them can be solved.
Read » Will Microsoft Stock Ever Have An Upward Trend? (Seeking Alpha) The worst case scenario for Microsoft right now is that its stock will continue to oscillate and investors will be stuck with a flat stock. Best case scenario for Microsoft a year from now is a price of around $33. This assumes earnings that beat expectations, a P/E ratio around 11x, and another long term cash cow added to Microsoft's product portfolio (but what?). It will take a lot for investors to be convinced that Microsoft is ready to take that next step and become a $300 billion company.
Read » 
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